The Broadbent Institute is calling for an independent investigation into CRA auditing choices after a study by the left-leaning nonprofit (but not charity) found strange inconsistencies.
The study conclusions suggest that progressive critics of the Harper government’s public policies are being targeted by CRA while right-leaning charities are getting special treatment despite seemingly inaccurate annual reports.
Their findings add to what has been acknowledged by policy academics since 2012, as outlined in my thesis, that Canada’s taxman has been politicized by the current federal government and its credibility compromised.
The institute, named after former federal NDP leader Ed Broadbent, looked at the websites and other public communications of 10 right-leaning charitable organizations that have declared that 0% of their resources were devoted to allowable “political activities.” The declarations were made on the annual filings to CRA for the three years of 2011–2013 and are publicly available.
Despite the charities having declared no political activities, the Broadbent study found examples of apparent “political activity” communications for all 10 organizations in each of the three years.
Some of the samples are fairly mild calls for changes in government policies or continuation of policies—as permitted under CRA regulations. Others have more bite to them in their call for changes—again generally permitted so long as a respectful tone is used. But a few comments seem to be pushing up against the unfortunately fuzzy line where allowable political activities cross over into forbidden partisan activities (including one which seems to call on the leader of an opposition party to pull the plug on a government and force an election in order to stop a policy being implemented). I would argue that the definition of partisan activities is too broad, but the issue here is about whether CRA is singling out for audits those charities that have different public-policy positions than that of the current federal government.
As regular readers of this blog know, tax regulations allow charities to devote up to 10% of their resources (and higher for smaller charities) to political activities. But these charities declared 0% despite what certainly looks to an educated observer to be meet the definition used by CRA (it must be noted that there is some confusion in the sector about definitions, but many of these particular charities are large enough to afford to hiring charity lawyers to reduce their risk).
In contrast, some left-leaning charities, or charities doing work on environmental, human rights and international development, and social issues are being audited for political activities despite having declared those activities in their filings. In most cases these organizations have declared political activities at 3% or less of their resources. Often, they are at 1–2%. The highest of those audited progressive charities is Environmental Defence which declared a declining percentage, from 8%, 7%, and 5% in 2011, 2012, and 2013 respectively—still well below the 10% limit.
The obvious question is why the unequal treatment? Why are organizations that declare 0% political activity when they seemingly are participating in political activities not being audited, while some of the most respected charities in Canada are being audited despite having documented their political activity to CRA?
Could it be that CRA is auditing charities that declare political activities, while assuming that they don’t need to worry about those who do not declare political activities? Certainly, that would be inept. But the suspicion, of course, is that the decisions about which charities to audit is rooted in darker impulses.
And the study also asks why the right-leaning charities seem not to know what constitutes a political activity when the definition (though not crystal clear) is right there on the CRA website. “It raises questions about the accuracy of the filings” of the 10 charities to CRA, notes the study. I’ll say.
The study carefully notes that “the evidence presented here is not intended to question whether these charities should or shouldn’t be engaged in political activity. Rather, it is meant to raise questions about how the CRA’s definition of political activity is being interpreted and the transparency of the CRA’s process for determining which groups to audit.” They see bias.
In concluding, the Broadbent report flags the growing belief that the Harper government has a program aimed at silencing dissent (my thesis used the word “muffling,” though some charity leaders and experts I interviewed preferred “silencing”). And it referred to the ”mounting evidence of a politicized CRA” before calling for an independent inquiry into CRA processes to ensure its fairness in enforcing regulations in the face of political interference.
“Progressive or conservative, the blunting of the ability of civil society to advocate and to engage in that most fundamental democratic right—debate, and occasionally, dissent—should concern us all.”
As I’ve blogged previously, the solution is not to audit right-leaning charities. Instead, the answer lies in calling off this witch-hunt and depoliticize CRA. And for government to stop viewing as enemies those in society, including expert charities, that have different public policy ideas than the cabinet.
Though the mechanism remains debated, my thesis found that the government has influenced CRA to target certain charitable sectors, and primarily from the progressive end of the political spectrum. And that the consequence is damage to democracy from this bullying abuse of power, and the loss of expert input to public policy debates as charities alter their communications out of fear of audits. Except, apparently, the right-leaning charities studied by the Broadbent Institute.
List of Charities Studied for Communication Activities
Atlantic Institute for Market Studies
Canadian Constitution Foundation
CD Howe Institute
Energy Probe Research Foundation
Focus on the Family
Frontier Centre for Public Policy
Institute for Canadian Values
Montreal Economic Forum
Meanwhile, please check out my Master’s thesis and feel free to forward and tweet it. Check out media coverage of my thesis findings and the national conversation it triggered. And you can follow me on Twitter: @GarethKirkby
I am a former journalist and media manager who recently completed my Master’s thesis for Royal Roads University and now work as a communication professional. I have been awarded the Jack Webster Award of Distinction, among others, for my reporting and editing.